Commonwealth Property Office Fund (CPA)

Commonwealth Property Office Fund
holds an Australian-based commercial property portfolio, valued this year at about $3.8 billion. The fund’s Aussie-only assets distinguish it from peers that have suffered as a result of offshore exposure. But like most listed trusts, the stock is trading at a big discount to its net tangible asset backing of $1.11. It is also well below its 52-week high. That discount has set tongues wagging and the stock is often mentioned as a potential acquisition target amid continuing speculation that the sector is ripe for consolidation. The underlying business is healthy, delivering a solid gain in net profit. It should benefit further from improving property values and tightening vacancy rates. A clutch of recent property disposals has delivered a kitty of $590 million. Its management is considering whether to invest in buybacks, the fund’s development pipeline, acquisitions or to distribute it.